International Advisory and Monitoring Board on the Development Fund for Iraq

Press Release
December 18, 2009

Statement by the International Advisory and Monitoring Board of the Development Fund for Iraq

The International Advisory and Monitoring Board (IAMB) of the Development Fund for Iraq (DFI) met in Washington, DC on December 16, 2009 and issued the following statement:

“The IAMB met to continue its oversight role over the use of resources of the DFI, which is the principal repository for Iraq's oil-export receipts, and oversee audits of the DFI in line with its mandate under UN Security Council Resolution 1859.

“In accordance with the IAMB Terms of Reference, the nomination and appointment by the
Government of Iraq of the DFI external auditor is subject to approval by the IAMB.
Representatives of the Government of Iraq and the Committee of Financial Experts (COFE)
had earlier briefed the IAMB on the evaluation process to select an external audit firm to
conduct an audit of the resources and disbursements of the DFI. In September 2009 the
IAMB approved the audit appointment process and concurred with the recommendation of
the Government of Iraq to appoint KPMG to conduct the 2009 audit of the DFI, including an
interim review for the period from January 1, 2009 to June 30, 2009. The IAMB reviewed
draft interim Statements of Cash Receipts and Payments for the DFI and the Oil Proceeds
Receipts Account, and was briefed by KPMG on the results of their interim work. The report
reiterates earlier findings about reporting of revenues in the DFI Statement of Cash Receipts
and Payments. A summary of the results of the KPMG interim review is available on the
IAMB website (www.iamb.info) and the COFE website (www.cofe-iq.net).

“The IAMB remains concerned that the 2008 audited financial statement of the Oil Proceeds
Receipts Account has not yet been completed and this is now well overdue. KPMG informed
the IAMB that they will provide the final report in the next week or so.

“The IAMB was briefed by COFE on actions taken to enhance the transparency and
accountability of the DFI, taking into account the audit findings of KPMG. The COFE
briefing of this meeting is published on the IAMB and COFE websites. COFE is receiving
full support from the Council of Ministers and there have been more positive responses of
late to COFE enquiries of ministries. COFE has continued to meet on a regular basis,
although not all meeting minutes have been published on its website. The IAMB welcomed
the publication by COFE of one page summaries of DFI inflows and outflows for the months
January through August 2009 on its website and the IAMB encouraged COFE to expand
these summaries to include explanatory notes. The IAMB welcomed an update report from
COFE and reiterated its call for reports every two months on progress on a range of matters.
COFE updated the IAMB on its efforts to support the necessary steps for the early passing
through parliament of laws concerning organization structures and regulations regarding job
descriptions and internal control systems.

“COFE also updated the IAMB on progress on developing a time-bound action plan, reported
to the Council of Ministers, to implement a comprehensive oil measuring system. COFE
followed up with the Ministry of Oil on their earlier plan to complete a fully operational oil
metering system and having it fully operational in 2009. COFE has now received a revised
detailed plan from the Ministry of Oil, with the oil metering system scheduled to become
fully operational by the end of 2011, except for one company that will be completed by 2012.
COFE updated the IAMB on progress to date and the detailed quarterly plans going forward
to achieve the 2011 goal. COFE noted that of the total 5,055 meters planned, only 1,624
(about 32%) had been installed to date. The IAMB welcomed the detailed update from COFE
and strongly urged full implementation of the action plan through end 2011, as envisaged by
the Government of Iraq.

“The representatives of the Government of Iraq, the COFE and the Iraqi Board of Supreme
Audit (BSA) reported on actions taken to follow-up on outstanding audit recommendations.
The IAMB welcomed the follow-up report on the 2008 audit recommendations, including
responses from ministries.

“The IAMB's mandate is due to expire at the end of December 2009. The IAMB looks
forward to clarity from the UN Security Council on arrangements for the oversight of the
DFI in the coming weeks. If the IAMB mandate expires in 2009, the IAMB would meet in
January to hold a press briefing on its work since 2003. If the IAMB’s mandate is renewed,
the IAMB will need to revisit its terms of reference, first formulated in 2003, in light of
current circumstances. The IAMB tentatively agreed to meet in late January 2010.”